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Stress Tests 2014: Can Banks Withstand Increasing Interest Rates? 

March 19, 2014
Meghan Foley, Wall St Cheat Sheet

Investors and analysts alike are confident the six largest United States financial institutions — JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs — will pass the annual stress tests conducted by the Federal Reserve and show they are able to withstand prolonged market stress like the financial industry experienced between June 30, 2008 and December 31, 2008 — the worst of the financial crisis. The results, which are set to be released March 20, will likely reflect both increased capital levels and the experience banks have amassed in the numerous tests conducted since 2009. “We know the banks have enough capital, that’s not the question,” Sterne Agee & Leach analyst Todd Hagerman told Bloomberg in an interview. “It’s more about whether there is something in the capital-planning process that the Federal Reserve might object to.”

On the eve of 2014 stress tests, a source familiar with the Federal Reserve’s thinking told CNN’s Fortune that the central bank recently informed several banks that it requires more data on their trading operations, and an official request is expected to come in the next few days.

Read more: Wall St Cheat Sheet

 
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